Talisman plans to unload non-core assets

Talisman Energy is about to test whether the asset market has softened along with the drop in commodity prices as it puts 17,000 barrels per day of conventional oil and natural gas production on the block, along with a bundle of oil sands properties.

Canada’s third-largest E&P independent, after EnCana and Canadian Natural Resources, has delivered on its mid-summer promise to dispose of non-core assets.

Scattered across five areas of Alberta, the mostly non-operated interests are estimated by Talisman to be worth up to C$1 billion.

The offering coincides with a sale by ConocoPhillips Canada of 23,000 boe per day.

Talisman has hired Tristone Capital to handle the transaction which it hopes to conclude by April 2007.

Talisman Chief Executive Officer Jim Buckee set the stage in July for his company to embark on a large-scale effort to streamline and simplify its operations as well as buy back stock to boost share values.

In addition to the conventional Alberta properties, Talisman is selling interests in the Brae field of the United Kingdom North Sea that produces 19,250 boe per day as well as pursuing a competitive auction process for assets in the Athabasca oil sands region, including 4,375 bpd of Syncrude Canada production and various interests in undeveloped leases, while leaving the door open to the prospect of remaining as a partner.

Kyle Preston, an analyst with Salman Partners, suggested the oil sands properties alone could fetch upwards of C$1 billion.

—Gary Park